An Integrated Model and a Solution Method for Production Scheduling and Vehicle Routing in a Two-Stage Supply Chain to Reduce Fuel Consumption

Presently, the world faces two challenges of fuel shortage and the reduction of environmental emissions due to the growing population and consequently increased fuel consumption in the manufacturing and transportation systems. Hence, the adoption of solutions that can reduce fuel consumption in these organizations is unavoidable. This paper presents a new mathematical model for integrating scheduling and routing problems in a two-stage supply chain. Vehicles can distribute the demands between customers in a multi-trip manner in which each vehicle has to be used multiple times. Vehicles, in this supply chain, are considered as multi-trip. In other words, in each period, any vehicle can be used several times. The model considers the effect of vehicle weight, speed and technical characteristic on its fuel consumption. The goal of the problem is to determine the optimal sequence of production, routing, and determination of the transmission speed in each distribution path by vehicles in order to minimize fuel consumption costs and lateness and earliness costs. A mathematical model for this problem is presented and an innovative heuristic solution algorithm is also introduced. The efficiency of the solution algorithm is examined through extensive numerical experiments. The results indicate that the production sequence, customer order distribution and vehicle speed can have a significant impact on fuel consumption. Finally, the results of the analysis of numerical examples and managerial insights are presented.